SunTrust Banks Inc. on Tuesday combined its sports and entertainment private banking practices in a unit that will also seek to develop wealth management business with professional athletes.
The Atlanta banking company, which has offered private banking, lending, and investment management services to country music performers since 1988 and to race car drivers and team owners since January 2004, said it wants to expand its client roster to include professional football, basketball, baseball, golf, hockey, and tennis.
Brian Williams, a senior vice president in SunTrust's private banking group who runs the sports and entertainment unit, said in an interview Friday that it will open offices in Orlando and Washington to attract clients among professional athletes and entertainers. To continue expanding the business, he said, the next step would be opening offices outside of SunTrust's footprint.
"To do what we want to do in sports and entertainment, we need to be in New York and Los Angeles, no question about it," said Mr. Williams, who was not a professional athlete himself. "We will be there. It is just a matter of where and how we will do it."
With the new offices, the SunTrust unit would have seven in five states. Mr. Williams said that, though the $179.7 billion-asset banking company does not break out managed-asset numbers for its divisions, the sports and entertainment unit holds 15% of SunTrust's assets under management.
SunTrust's STI Music Private Bank Group got its start with country music in Nashville, he said. And in January 2003, it expanded into Miami and Atlanta; the Miami office targets Latino musicians; the Atlanta office, rhythm and blues and hip hop.
In 2004 SunTrust started a Motorsports Private Banking Group to develop business with race car drivers and team owners. SunTrust has made clients of about 80% of country music performers, he said, and it also does business with more than half the Nextel Cup race drivers and one-third of the Grand American teams.
As SunTrust's advisers succeeded at managing assets for both musicians and driving teams, Mr. Williams said, they began to encounter agents for athletes in the National Football League, the National Basketball Association, and Major League Baseball who wanted similar services.
"This wasn't so much something we were going after as much as it was an opportunity that we ran into," he said. "We found ourselves with a sizable book of business, and we wanted to develop more."
State Street Corp. in Boston and City National Corp. in Beverly Hills have seen and targeted this opportunity as well. In fact, Mr. Williams said, "I have friends at City National, and they are primarily on the West Coast and primarily interested in film and entertainment. To be honest, we have been able to help each other when we have been in each other's footprint."
SunTrust has teams in Nashville, Atlanta, Miami, Charlotte, and Daytona Beach, Fla., he said, and 15% of his unit's business already is with professional athletes.
Orlando was a logical office site for his business because so many professional athletes live at least part of the year in or near the area, which is also a center for professional golf and tennis, he said. And Washington was selected because many sports agents, lawyers, and professional teams are based in the region.
"This area is kind of all-encompassing," Mr. Williams said. "There is also a big music scene there, particularly in Virginia Beach. There are a lot of artists and music there. We wanted to be really strategically located."
SunTrust faces stiff competition from the other financial companies, analysts said.
"This is the most sought-after demographic," said Burton Greenwald, a Philadelphia analyst at BJ Greenwald Associates. "Every advisory firm and every private bank is trying to manage these assets. They need a presence in major metropolitan markets in order to succeed."
In Southern California, for example, City National has a division catering to entertainers, and two years ago State Street bought a Los Angeles firm, Bel Air Investment Advisers, that managed the portfolios of 200 celebrity clients, including Barbra Streisand, Lee Iacocca, and Geraldo Rivera. The Boston banking company manages $1.4 trillion of assets, mostly for institutional investors.
Mr. Williams said most private banks cannot just hang a shingle and begin serving pro athletes. SunTrust can deploy a presence "that goes back 19 years," he said.
